Hewlett Packard: Supply Chain Management

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Introduction

Business organizations undertake a wide range of activities that are intended to deliver profits. One of such functions that are essential in any firm is supply chain management (SCM). This strategy refers to the manner in which companies acquire raw materials that are then processed to deliver the intended products. When done properly, SCM can help streamline operations, increase competitive advantage, and add value to the customers. This paper examines and describes Hewlett Packard’s (HP) SCM as an outstanding example for organizations that want to achieve their maximized potential. The discussion outlines the major issues surrounding this company’s SCM and compares it with that one for BMW-MINI.

Brief Description of Hewlett Packard

HP is a multinational corporation that produces, designs, and markets a wide range of electronic devices and software. It presently operates in different industries, including computer hardware, information technology (IT) services, IT consulting, and computer software (Wadlow, 2020). Between 2006 and 2013, the company was the leading producer and marketer of computers at the global level. It partners with different companies in different sectors to achieve its business goals, such as retailers, manufacturers, and software developers. The business has developed its model for the past eight decades (Kumar and Kushwaha, 2018).

The company has acquired a number of corporations in the past to expand its capital and performance, such as Compaq in 2002 and EDS in 2008 (Wadlow, 2020). The organization has invested widely in different parts of the world, such as Asia-Pacific, Africa, the Middle East, North and South America, and Europe.

In terms of profitability, HP has remained successful from the proceedings made from different sectors. For instance, the company’s returns for 2018 amounted to around 52 billion US dollars. The company has been on increasing its revenues over the years. The current technological developments have made it possible for HP to venture into different fields, thereby maximizing its profitability (Simon et al., 2015). Its operations and the presence of recruited manufacturers for designed computers and accessories explain why the implementation of an effective supply chain system remains critical.

Hewlett Packard’s Supply Chains

HP’s business model is designed in such a way that logistical operations form the basis of operation to support the acquisition of finished products from selected manufacturers. Outsourced manufacturers (OMs) will be compelled to be part of supply chain processes that help deliver products to the end user or warehouses in a convenient and timely manner. The corporation’s success is attributable to the state-of-the-art technology and efficiency, and coordination that all stakeholders implement continuously (Wadlow, 2020). This company’s supply chain entails all key procedures and activities that help meet the demands of the customers. For instance, the company’s takes the issues of inventory management, product warehousing, and delivery seriously to ensure that the intended goals are recorded.

The company begins by identifying producers whose items resonate with the company’s topmost priorities. Such partners will be involved in all options and platforms to ensure that the targeted customers are aware of the products. To support the equipment handling procedures, HP has been using advanced technologies to streamline operations. For instance robots and experts are part of the process to maximize the level of efficiency (MacArthur and Barton, 2015). Logistical operations and continuous monitoring technologies are involved in the supply chain to support the delivery of positive results.

For the e-commerce segment, HP relies on the developed technologies to include barcodes on different items that make it possible for the company to do business with online-based retailers. Such codes are automated in such a way that they match the demands of the customers with the packed and delivered products. To ensure that the process is seamless and capable of delivering the intended results, the company has put in place several critical elements that work synergistically (Abdi et al., 2017). The first one is that of warehousing whereby acquired and stored depending on the areas of business, such as computer parts, accessories, and laptops.

The second one is that of delivery whereby customers can select various options and pay accordingly. The inclusion of advanced technologies ensures that such activities are seamless and capable of delivering the intended results.

The third aspect that forms an integral part of the supply chain is that of manufacturing. This concept has made it possible for HP to produce its items from different parts of the world and market them successfully. Such companies are required to be involved in the supply chain process and ensure that the presented orders are completed and delivered in a timely manner (Shi, Chen & Ye, 2019). Such an approach has led to an expanded inventory and positive business outcomes.

Pricing is the next element that defines the nature of the supply chain. To deliver positive results, this company has been providing various options that work efficiently for different individuals depending on their needs. Shipping windows are merged with pricing procedures to make the process streamlined while maximizing profitability (Varsei, 2016). HP’s international supply chain model empowers manufacturers to produce and deliver items that can meet the demands of customers from different parts of the world. These concepts are designed in such a way that they deliver the intended profits and support the changing demands of the targeted customers.

HP ‘s use of the OM model ensures that the final products deliver the HP design. The use of several OMs increases chances of diversity and flexibility. Third-party suppliers are also involved in the supply chain to produce and deliver items that take the company corporate image to the next level. Sometimes the company relies on its own manufacturing plants to innovate and present products for different customers. A Leagile method is put in place to match customers’ demands with the finished products.

This model is capable of ensuring that the products are designed, packed, and transported depending on the specific demands of retailers in different regions. Distribution and stock administration measures are implemented to reduce holding time (Singh, Garg and Sachdeva, 2018). These attributes explain why the supply chains are capable of supporting organizational performance.

Strengths, Weaknesses, Opportunities, and Threats

Strengths

HP’s supply chain system has specific strengths that make it competitive and capable of maximizing its profitability. The key ones are outlined below.

  • HP supports its supply chain using advanced technologies that streamline operations and ensure that customers receive their ordered products in a timely manner.
  • The company has a strong balance sheet that helps it adjust the supply chains depending on the changing demands of the customers (Karayel, 2017).
  • The organization enjoys a stable relationship with the current suppliers and OMs in different parts of the world.
  • HP has a good brand and reputation that makes it attractive to more suppliers and logistical companies.
  • The supply chain is coordinated efficiently and capable of meeting the expectations of all key partners.
  • This company is presently operating in a robust and dynamic local market that is characterized by continuous innovation within the field of supply chain..
  • The key elements of its SCM developed within the past few years continue to make it possible for the company to achieve most of its business goals.
  • Currently, HP’s supply chain charges a small premium to most of the customers who require various materials to be marketed successfully to them. This strategy has reduced the level of competition, thereby making the company attractive to more business partners, suppliers, and logistical operators (Mor, 2018).
  • The company has a long history in marketing different products and supplying them in a timely manner to the targeted customers. This strong foundation explains why HP’s supply chain remains efficient and capable of meeting the diverse needs of clients in different parts of the globe.
  • The company’s supply chains are managed and monitored by competent individuals who are conversant with emerging technological systems. These professionals solve errors when they occur and monitor operations to ensure the entire supply chain is convenient and successful.
  • The SCM is designed in such a way that it has different processes, warehouses, and robots designed to handle products depending on their physical properties. The inclusion of barcodes guides the process to ensure that products do not get lost (Karayel, 2017).
  • The concept of continuous improvement is replicated in different paths and activities across the supply chain to maximize efficiency and deliver the best experience to the targeted customers.

Weaknesses

Despite the current strengths that make HP one of the reputable companies with distinguishable SCM, there are specific weaknesses that all leaders should not ignore. Some of the outstanding ones are presented below.

  • The company has several divisions and outsourced manufacturing centers that are run using hierarchical approaches. This strategy compels different divisions to adopt their unique models that tend to strain or disorient the effectiveness of the SCM.
  • The organization is yet to acquire enough physical outlets and stores for warehousing purposes if it is to meet the changing demands of more customers in more parts of the world.
  • HP is presently finding it hard to record high return on SCM investment. The total amount of income accrued from the SCM remains quite low since it only relies on the available profit margin (Soleimani, 2018).
  • The company lacks diversity within its supply chain networks. This gap makes it impossible for the company to succeed at the international level.
  • Currently, this organization’s supply chain primarily focuses on internal delivery while ignoring the expectations and demands of some of the key stakeholders.
  • The company has been doing very little to market its operations and products in different parts of the world. This weakness explains why the company is facing competition from Asian corporations, such as Samsung. This organization has established its supply chain and implemented powerful strategies to meet the demands of customers in different third world countries.

Opportunities

HP stands a chance to capitalize on a number of factors and trends to leverage its SCM operations and expand its business processes. The consideration of such opportunities can help the organization improve its supply chains and address the challenges some of the customers encounter when doing business with HP. The key opportunities in the area of SCM include:

  • More customers are presently becoming aware of online-based logistical operations. They can identify electronics from foreign companies, purchase them, and have them delivered through coordinated logistical processes.
  • HP has the potential to identify emerging suppliers and providers of logistical operations.
  • The global community is presently experiencing technological advancements that have the potential to improve HP’s supply chain, including artificial intelligence, drones for monitoring items, tracking services for locating fleets, and advanced robotics.
  • International markets are becoming more lucrative and capable of meeting the demands of more customers due to advanced logistical processes.
  • The current standardization trend recorded in the field of e-commerce is a development that can help HP develop, acquire, and deliver more products to different customers conveniently (Anca, 2019).
  • The Internet is presently becoming a defining factor in different parts of the world. This company could rely on this technological advancement to identify more customers and support their changing demands.
  • More people in different parts of the world are relying on handheld devices to complete transactions online. This organization can consider this development and open additional physical stores and link them with the current supply system. Such an approach will maximize the company’s total orders and improve the level of profitability.

Threats

HP’s SCM is facing various threats that have the potential to affect the profitability of its supply chain process. Some of the key ones include:

  • The company has found itself in a fixed pricing scenario whereby it cannot increase prices to maximize its profits.
  • The government is keen to introduce new regulations, policies, and bureaucracies that might affect the effectiveness and speed of the supply chain process.
  • Geopolitical forces and trends experienced in the United States over the past three years have affected the sustainability of this company’s supply chains.
  • Most of the products are priced using American economic experiences and positions. Such an approach makes the model inappropriate for the potential customers in the developing world (Agus, 2015).
  • The e-commerce requires reduced financial resources to invest in. the upfront amount of money required to start and operate such a business successfully still remains quite low. This aspect explains why companies can copy its supply chain and make it less competitive.
  • Over the years, the company has been finding it hard to consider additional strategies to transform the supply chain and meet the demands of more customers.

Comparison with BMW

From the above section, it is evident that HP has developed and implemented a powerful supply chain that resonates with its business model. The elements put in place allow outsourced manufacturers to select the best option that can deliver sustainable benefits. The company has considered modern technologies, operations, decision-making processes, and systems that have the potential to make the supply chain process efficient. The company engages in R&D to improve the supply chain continuously (Karayel, 2017). The involvement of several partners or outsourced manufacturers in the SCM makes the process smooth and increases its chances of success in the major fields it operates in.

BMW is another company that has a powerful supply chain designed to meet the demands of retailers and customers in all parts of the world. The reason for selecting this organization is because it has been in the business of logistical operations for many years to support the production of high-quality cars that can support the demands of more customers (Hussain, 2016).

The insights and aspects of its supply chain could become the best model for guiding future companies to perform optimally in this area and achieve their potential. Just like HP, BMW has become a global brand that is recognized in many regions and local areas across the globe. According to Agus (2015), this corporation has many partners in several countries across the globe. The nature of its business model allows the supply chain to be simple and transparent. This effort is supported through the use of proper planning, ordering procedures, and B2B models. The company liaises with a number of companies that design and manufacture specific parts that are eventually utilized to make BMW cars.

BMW’s supply chain starts with the procurement of the relevant raw materials depending on the anticipated vehicles. Some of them include metals, automobile parts, paints, and lubricants among others. The company will also source different spares from different supplies across Germany (Karayel, 2017). This step begins with a unique supply process whereby such materials are delivered and fabricated to meet the demands of the targeted vehicles. Materials are ordered and delivered to support the car design, assembly, and production processes (Wadlow, 2020).

Once the vehicles are ready, the company starts a unique logistical journey whereby they are delivered to auto shops and companies where the customer will access them with much ease. The company goes further to rely on the use of a reverse system whereby the collected information is considered to improve the performance and superiority of the finished cars. The ultimate aim is to improve the level of efficiency while maintaining the company’s corporate image.

This kind of strategy is supply chain echoes the one implemented at HP. The only difference is that HP might contract companies in Asia to manufacture and assemble parts in accordance with the provided specifications. A long journey of logistical will then begin whereby the products will be shipped to the United States. The parent company will expand the logistical system to ensure that all key outlets across the globe are served.

Additionally, it is worth noting that the two companies have developed superior supply chain processes that serve customers in many parts of the world. The consideration of the demands of the final clients to inform the nature of supply chain is a unique practice in the two companies. The above description has revealed that both HP and BWM give power to suppliers to determine their terms and incorporate their needs in the intended supply chain systems (Donnelly, 2020). The primary aim of considering such aspects is to streamline the process and eventually support the final customers. These attributes explain why the two companies have succeeded in their respective fields.

The inclusion of modern technologies to support and sustain the supply chain processes is a common trend in the two companies. Specifically, BMW has acquired robots and advanced systems to coordinate operations in assembly lines and meet the demands of the intended customers (Karayel, 2017). Similarly, HP relies on such technologies for designing and producing computer parts, packaging, and distributing finished devices to customers in different regions (Donnelly, 2020). Unique strengths are evident since these companies consider the power of the Internet to inform the key stakeholders about the completed operations and initiatives that support the delivery of timely results.

The inclusion of other players is a common practice employed at HP and BMW to streamline the effectiveness of the supply chain process. Specifically, the companies allow financial, human resource, and R&D department to be involved, make timely decisions, and identify some of the best approaches to manage the supply chain process (Karayel, 2017). These efforts are essential and have made it possible for both companies to achieve their potential. Such an approach also allows the leaders to consider some of the best ways to meet the changing demands of the final consumer. The consideration of additional supply chain practices is essential to deliver desirable results.

While these two companies operate in different sectors, it is agreeable that they have developed superior logistical processes that help tem deliver their products successfully. Such supply chain systems help acquire the required finished parts and assemble them from a central location. They involve partners continuously to ensure the products are finished within the stipulated period (Agus, 2015).

The companies rely on international logistical processes to ensure that the finished products are available to the targeted customers in different parts of the world. The supply chains also benefit from the able leadership of experts who coordinate logistical operations and solve challenges that might emerge (Miller, 2020). Consequently, the companies have continued to record positive gains due to the effectiveness of the supply chain process.

Just like with HP, it is evident that BMW’s supply chain is developed using evidence-based approaches to maximize the level profitability. The leaders of both BMW and HP consider the existing strengths, solve emerging challenges, embrace modern technologies, and consider key areas for improvement continuously. The consideration of these key initiatives has made it possible for both HP and BMW to develop superior supply chain systems that are capable of meeting the demands of more customers (Hussain, 2016).

Unfortunately, such systems have unique weaknesses and gaps that explain why the corporations are yet to tap the existing potential in all parts of the world. Most of the improvements should be designed in such a way that they revolve around the nature of products in question, the required raw materials, and the expectations of every final customer.

As a leading company, BMW has gone a step further to develop a global supply network that has the needs of all participants considered. Specifically, the current model focuses on innovation, quality, and value creation. The company has over 12,000 suppliers located in different nations across the globe. BMW compel such partners to meet the stipulated social and environmental standards defining BMW’s business model (Karayel, 2017). Additional issues to consider conformity to human rights, promotion of social standards, and consideration of labor laws. Carbon emissions are also considered as part of the supply chain process. These attributes make BMW’s supply chain outstanding and capable of meeting the demands of more stakeholders.

BMW goes further to take the issue of sustainability risk management seriously in comparison with HP. Specifically, three steps are considered that help reduce challenges and ensure that timely results are recorded (Karayel, 2017). Some of these issues include identifying risks, conducting continuous audits and assessments, and engaging in internal supply chain assessment. These initiatives are essential to prioritize operations while reducing possible challenges. Consequently, BMW has succeeded in improving and developing a unique supply chain that delivers the intended organizational goals. While HP considers some of these key aspects, additional measures would be needed if the company is to improve its assessment strategies.

While HP has an effective supply chain system, it can learn a number of lessons from BMW’s model. Specifically, it can formulate a new model for compelling all participants and suppliers to fulfill the best ethical and environmental standards (Karayel, 2017). Such an approach will result in improved social standards and consideration of human rights. Additionally, HP can follow BMW’s model to identify additional strategies for mitigating risks. The process of auditing and continuous assessment can help improve the effectiveness of the supply chain process. Finally, all suppliers should be compelled to deliver items just-in-time to meet the demands of all key customers. Coupled with the current attributes, HP will develop a superior supply chain and eventually become more profitable.

Recommendations

The above analysis has identified HP as one of the corporations with a developed and customized SCM that resonates with the changing demands of different partners and customers. Being a multinational corporation, its supply chains are interconnected and dictated by the number of manufacturers and suppliers of computer parts, accessories, and software. However, HP’s topmost leaders can consider some key areas for improvement and make the relevant decisions.

First, the managers at this company expect most of the potential customers to learn more about its products from other sources. Unfortunately, such a model does not meet the expectations of all potential customers. The supply chain is also managed and pursued as if computers are products that clients do not need urgently. To minimize these issues, the leaders at HP could improve the speed of logistical operations and analyze the level of demand in different regions. They will assess emerging expectations and align he supply chain to support effectiveness and speed. The considerations of these critical issues will maximize chances of performance and take the company closer to its business goals.

Second, the supply chain manager at HP has a chance to promote visibility by empowering suppliers and manufacturers of various items to improve the supply chain visibility. Specifically, advanced technologies can make it possible for the manufacturers to monitor all consignments in real-time. Such a strategy will ensure that timely decisions are made (Baur and Frazzo, 2018). The acquired information can guide all key partners to predict future demand and be in a position to develop and produce items that can support the delivery of positive outcomes.

Third, HP operates an independent SCM model that is intended to support the process acquiring raw materials and delivering finished products to the anticipated customers. Such a model is matched with the company’s marketing strategy to ensure that additional profits are recorded. However, the organization has not considered the power of engaging the IT department and making it part of the process. This segment can present additional insights and software technologies that can help revolutionize the supply chain process (Baur and Frazzo, 2018). This strategy can make it possible for the company to minimize some of the risks recorded in the past and improve the speed of product delivery.

Fourth, HP stands a chance to benefit from an improved supply chain processes if the relevant leaders take the issue of constant development seriously. Presently, HP remains a successful company due to the use of R&D to innovate and support the production of superior products that resonate with the changing expectations of many clients. The same idea could be replicated to support the entire supply chain process. Baur and Frazzo (2018) identify training programs as essential and powerful approaches for empowering more employees and making it easier for them to pursue their goals (Burgelman, McKinney and Meza, 2017). Heads of different departments could be involved in such programs to learn how they can merge inventory with production.

Fifth, the concept of project management has worked efficiently in different sectors and departments to improve organizational performance. At HP, the same idea could be replicated to ensure that all supply chain activities are developed and improved in accordance with the emerging demands in the market. The supply chain managers in different regions will consider such ideas and merge them with outlined organizational goals. They will go further to formulate a better distribution strategy that is capable of meeting the demands of every new customer (Hassan, 2016). The professionals will find the concept powerful and capable of guiding them to solve emerging risks.

They will highlight new opportunities in the global market and eventually meet the demands of all key stakeholders (The Chain Magazine, 2019). Consequently, a cross-functional model will emerge and ensure that the relevant decision-makers focus on the best ways to improve the supply chain process continuously.

Conclusion

The above discussion has revealed that SCM is a powerful framework that helps companies acquire the right raw materials, manufacture the intended products, and deliver them to the targeted customers. Managers in such fields are required to oversee a wide range of logistical and distribution operations to support the smooth running of the organization. HP’s SCM is sustainable and capable of delivering positive results. Its model is more or less similar to the one BMW implements since both offer identical strengths that help promote profitability.

However, the recorded opportunities and weaknesses in its supply chain can guide the leaders to consider the proposed recommendations and ensure that company improves its logistical visibility and eventually become a leading competitor at the global level.

Reference List

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